AdWords is Google's main advertising product, and main source of revenue. AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for text and banner ads. The AdWords program includes local, national, and international distribution. Google's text advertisements are limited to a title line and two content text lines.

Pay-Per-Click advertisements (PPC)
In PPC advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a search engine user performance a query using uses Google's search engine, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes also above the main search results.

The ordering of the paid listings depends on other advertisers' bids and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates and the relevance of an advertiser's ad text, keyword, and landing page to the search, as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser's keywords. The auction mechanism that determines the order of the ads has been called a "generalized second price" auction.

All AdWords ads shown on Google's search engine result pages (SERPs). Advertisers also have the option of enabling their ads to show on Google's partner networks. The "search network" includes AOL search, Ask.com, and Netscape. Like www.google.com, these search engines show AdWords ads in response to user searches.

The "content network" shows AdWords ads on sites that are not search engines. Google automatically determines the subject of the pages and displays ads for which the advertiser has specified an interest in that subject. The ads show in boxes resembling banner ads, with the designation "Ads By Goooooooogle." These content network sites are those that use AdSense, the other side of the Google advertising model. Click through rates on the content network are typically much lower than those on the search network and are therefore ignored when calculating an advertiser's quality score.

AdWords is used by publishers who wish to bring traffic to their websites. The biggest competitors are Yahoo! Search Marketing (formerly Overture) and Microsoft adCenter.

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